Strategic Management an Overview

Introduction

The function of coordinating the efforts of people to achieve goals and objectives through efficient and effective use of resources is known as management. Management involves planning, organizing, staffing, leading and controlling to accomplish desired aims. Resourcing includes manipulation of human resources, financial resources, technological resources and natural resources. All the resources are limited in nature. Strategy is very important for an organization due to the limitation of resources.

Strategy

The word strategy has so many meanings itself and all these meanings are useful, important and relevant to the people who are setting strategy for their organizations and corporations. Various authors have drawn their attention to the concept of strategy. The word strategy derives from the Greek word “strategos”, the meaning comes from the roots of “army”. The meaning of strategy is the planning of destroying enemies by effectively using the resources. Therefore the concepts of strategy have been formerly used in the context of military and it is remaining as the benchmark of all the definitions of strategy. Various writers have given various definitions for the concept of business strategy from time to time as briefly described below.

The series of actions which is decided by the firm according to the situation is known as a strategy (Morgenstern & Neumann, 1947). Based on this definition many authors developed concepts of business strategy. Analyzing the present situation and changing if it is necessary is known as a strategy (Drucker, 1954). According to this definition its need to find out what are the resources a firm has or need to acquire to realize its mission and objectives.

 A strategy is a guideline for decision making based on the determinants market scope, growth rate, competitive advantage, and synergy (Ansoff, 1969). According to Alfred (1962), the strategy is the formulating basic long term goals and objectives of an organization and the implementation of a course of actions and the allocation of necessary resources for carrying out these goals. A long term Harvard professor and editor of the Harvard Business Review Andrews (1980), has defined the strategy as a pattern of decisions in an organization which formulates goals, objectives, and purposes and produces principle policies and plans to achieve those goals and defines the economic and non-economic contribution is going to make to its stakeholders. 

The Harvard professor Michel Porter has made a narrow definition of strategy based on the competition. According to his definition, the strategy is a wide formula which helps an organization to compete, set goals and decides what policies will be needed to carry out those goals. A strategy can be a plan, a pattern, a perspective, a position and also it can be a ploy or a manoeuvre which can help an organization to avoid its competitors (Mintsberg, 1994). When all the above definitions are taken into consideration there are similarities, but despite the similarities, there are some important differences too. Therefore all these definitions are different opinions and views of different scholars.

In this paper the author proposes a new definition for the strategy as follows. “A the strategy is a plan of actions that one use to formulate goals and objectives and the means of achieving these goals and objectives” Following this definition, the strategy is a plan of actions which make the each and every member of the organization can understand the reason for the organization’s existence. And also it implies how a given target can be achieved.

Strategic management

Strategic Management is a broader term than strategy. And also it is a process which includes environmental analysis of the organization by the top managers for the purpose of strategy formulation and the plan of strategy implementation and controlling.

Strategic management is a collection of ongoing activities of strategic analysis, strategy creation, implementation and monitoring. It systematically organizes the resources in align with vision, mission and strategy throughout the organization. Strategic management doesn’t predict the future but prepares the organization for it by knowing the exact steps to implement a strategic plan.

Initially strategic management was a part of strategic planning which is now the main instrument of it. Strategic planning is incorporated with strategic management which unites both planning and management in the same process (Porth, 2002). Now strategic management has become one of the most prominent areas of management. It consists of a comprehensive collection of management actions which supports company managers to keep the organization consistent with the environment and shows the correct path of development (Jones, 1981). 

Strategic management in an organization focuses on the issues of creating and sustaining competitive advantage (Bowmal, et al., 2002). It is a process and a path guiding actions all over the organization (Dess, et al., 2007). It is a collection of actions consists of organizational analysis, decisions and actions to create and sustain competitive advantages. These competitive advantages support an organization to explore opportunities and minimize threats from the environment. Therefore more generally strategic management is a comprehensive ongoing process which involves determining the mission and the objectives of the organization within the internal and external environment.

Strategic planning

Strategic planning is a road map which gives directions to an organization from now, where to go or where should be in five or ten years. Strategic planning involves multi-year projections which are not very specific like operational planning. It is a well-organized set of activities which helps an organization to organize the present based on the projections of the target future. A strategic plan is very important for an organization to develop a comprehensive plan which includes both long-range and strategic elements. The strategic plan should be based on the actual current situation and be simple, clear and written. And also it should have given enough time to be settled otherwise it will cause problems.

 A. Purpose of Strategic Planning Better serving the needs of stakeholders and establishing the priorities of the organization to accomplish the above needs are more important for an organization. A strategic plan guides an organization in implementing, evaluating and making adjustments to the programs when it is necessary. The plan should be flexible and practical. The development of a strategic plan requires more discussion and timing and need to examine the ideas and options of the leaders. It should be an integrated document which incorporates the organization's objectives, purpose, mission and regulations with the feelings, thoughts and opinions of the developers. However, most of the time the development is less complicated than the implementation of it.

B. Strategic Planning Process Most of the times, the strategic planning process uniquely designed to fit the specific needs. Anyway, all the successful models include most of the steps. The author discusses the essential steps of a strategic planning process as follows.

Strategic thinking

On one hand strategic thinking can be viewed as a part of the strategic planning process since a great deal of strategic thinking is required to develop a successful strategic plan. On the other hand, strategic planning and strategic thinking can be viewed as the two sides of the same coin and each one on its own is necessary. However, for an efficient strategic management framework, both strategic planning and strategic thinking are necessary. Strategic thinking can be defined as a process of arranging options through institutional thinking by evaluating alternatives and decisions to find out best fit among the institutions, its resources and the environment. Strategic thinking is a distinct way of individual thinking which utilizes creativity and intuition and that builds “an integrated perspective of the enterprise”  (Mintsberg, 1994).

Figure 01 Source : (Hanasini, 2016)

Figure 01 illustrates the benefits which can be gained by engaging in strategic planning and management. Through enhanced communication or through dialogue and participation, managers and employees can support the organization to successful strategic management. All the firms need to be helped by employees to successfully determine the mission (Fred, 2011). Strategic management process motivates all managers and employees to be dedicated to the organization. Very first the communication within the company should be developed. Therefore the employees can be able to know what the company is doing, how the goals can be achieved and then they can make a greater commitment for the organization success. Then the managers and employees can understand each other and become more hardworking and creative. With the efforts of all employees the organization can be more successful  (Fred, 2011).

More Precisely the benefits of strategic management are in two ways; financial benefits and non-financial benefits. All the improvements in the sales, profitability and productivity include in financial benefits. Sound strategic management can lead an organization to realize the mission and objectives of the company  (Fred, 2011). There are non-financial benefits too. They are listed as follows;  (Fred, 2011)

• It enhances the awareness of competitors ‘strategies threats from the environment and employee productivity.
• Helps to avoid resistance to change and explore more opportunities.
• Enhances the problem-avoiding ability of the organization by improving interactions among managers at different levels of the hierarchy.
• It brings order and discipline to the organization.
• It develops a framework to coordinate and control the activities in an organization. • It enhances the communication and the interaction between managers and employees. It develops the strategic thinking ability of all members of the organization

Conclusion

Strategy is a very useful concept for an organization, since it has many variations. In this paper, it has entailed some definitions of the strategy used by different scholars and author has proposed a new definition for the strategy as “A strategy is a plan of actions that one uses to formulate goals, objectives and means of achieving those goals and objectives”. Strategic planning is a road map for an organization which helps to manage the enterprise, especially if a strategic plan can successfully deploy throughout the organization. Strategic thinking and strategic management are more important aspects of senior management’s responsibilities. The strategic planning process is a very comprehensive process which requires a great deal of strategic thinking. Strategic management helps an organization to determine its’ mission and objectives through creating & sustaining competitive advantage. Today the organization has realized the benefits of strategic management does to an enterprise. The article has briefly explained the financial and non-financial benefits of strategic management towards the organization.

References

Alfred, C., 1962. A Strategy and structure: Chapter in the history of American industrial enterprise. Cambridge Mass: MIT Press.

Andrew, K., 1980. The concept of corporate strategy. 2nd ed. s.l.:Dow- Jones Irwin.

Ansoff, H. I., 1969. Business Strategy Selected REading. MD: Penguin Books.

Bowmal, E., Singh, H. & Thomas, H., 2002. The domain of strategic management: History and evaluation. Sage Journal.

Dess, G., Lumpkin, G. & Eisher, A., 2007. Strategic Management. 3rd ed. New York: McGraw Hill.

Drucker, P., 1954. The Practice of Management. New York: Harper and Brothers.

Fred, R. D., 2011. Strategic Management: Concept and case. 13th ed. s.l.: Person Education Inc.

Hanasini , A., 2016. An Overview of Strategic Management: An Analysis of the Concepts and the Importance of Strategic Management. International Journal of Scientific and Research Publications, 6(2), pp. 124-127.

Jones, J., 1981. Application of decision support concepts to strategic management. Journal of management education.

Mintzberg, H., 1994. The rise and falls of strategic planning. s.l.: Basic Books.

Morgenstern, O. & Neumann, V. J., 1947. Theory of games and economic behaviour. 2nd ed. Princeton: Princeton University Press.

Porth, S., 2002. Strategic Management:A Cross-functional approach. New Jersey: Prentice-Hall.